# ACCOUNTING

Problem 3-14 Days’ Sales in Receivables

A company has net income of \$188,000, a profit margin of 7.1 percent, and an accounts receivable balance of \$127,370. Assuming 70 percent of sales are on credit, what is the company’s days’ sales in receivables? (Use 365 days a year. Do not round intermediate calculation and round your final answer to 2 decimal places. (e.g., 32.16))

Days’ sales in receivables days

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WorksheetProblem 3-14 Days’ Sales in Receivables

Problem 3-15 Ratios and Fixed Assets

The Le Bleu Company has a ratio of long-term debt to long-term debt plus equity of .31 and a current ratio of 1.70. Current liabilities are \$870, sales are \$6,290, profit margin is 8.7 percent, and ROE is 19.2 percent. What is the amount of the firm’s net fixed assets? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Net fixed assets\$

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WorksheetProblem 3-15 Ratios and Fixed Assets

Problem 3-21 Calculating EFN

The most recent financial statements for Moose Tours, Inc., appear below. Sales for 2012 are projected to grow by 20 percent. Interest expense will remain constant; the tax rate and the dividend payout rate will also remain constant. Costs, other expenses, current assets, fixed assets, and accounts payable increase spontaneously with sales.

MOOSE TOURS, INC.

2011 Income Statement

Sales\$747,000

Costs582,000

Other expenses18,000

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Earnings before interest and taxes\$147,000

Interest expense15,000

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Taxable income\$132,000

Taxes 30%39,600

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Net income\$92,400

________________________________________________________________________________________________________________________________________________________________

Dividends\$18,480

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MOOSE TOURS, INC.

Balance Sheet as of December 31, 2011

AssetsLiabilities and Owners’ Equity

Current assets  Current liabilities

Cash\$20,640    Accounts payable\$54,800

Accounts receivable32,960    Notes payable14,000

Inventory69,920________________________________________________________________________________

Total\$68,800

________________________________________________________________________________________________________________________________________________________________

Total\$123,520  Long-term debt\$130,000

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Fixed assets  Owners’ equity

Net plant and equipment\$410,000    Common stock and paid-in surplus\$116,000

________________________________________________________________________________    Retained earnings218,720

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Total\$334,720

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Total assets\$533,520  Total liabilities and owners’ equity\$533,520

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If the firm is operating at full capacity and no new debt or equity is issued, what external financing is needed to support the 20 percent growth rate in sales? (Do not round intermediate calculations and round your final answer to the nearest whole dollar amount. (e.g., 32))

External financing needed\$

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Problem 2-22 Financial Statements

Use the following information for Ingersoll, Inc., (assume the tax rate is 34 percent):

20112012

Sales \$8,135   \$8,709

Depreciation1,155  1,156

Cost of goods sold2,726  3,090

Other expenses669  564

Interest555  633

Cash4,139  5,233

Accounts receivable5,469  6,157

Short-term notes payable824  776

Long-term debt13,790  16,350

Net fixed assets34,755  35,637

Accounts payable4,376  4,215

Inventory9,700  9,968

Dividends986  1,081

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Prepare an income statement for this company for 2011 and 2012. (Do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

Ingersoll, Inc.,

Income Statement

20112012

\$

\$

________________________________________________________________________________

\$

\$

________________________________________________________________________________

\$

\$

________________________________________________________________________________

\$

\$

________________________________________________________________________________________________________________________________________________________________

\$

\$

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Prepare a balance sheet of this company for 2011 and 2012. (Do not round intermediate calculations.Be sure to list the accounts in order of their liquidity.)

Prepare a balance sheet of this company for 2011 and 2012. (Be sure to list the accounts in order of their liquidity.)

Ingersoll, Inc.

Balance Sheet as of Dec. 31

20112012

Assets

\$

\$

________________________________________________________________________________

Current assets\$

\$

________________________________________________________________________________

Total assets\$

\$

________________________________________________________________________________________________________________________________________________________________

Liabilities

\$

\$

________________________________________________________________________________

Current liabilities\$

\$

________________________________________________________________________________

Total liabilities & owners’ equity\$

\$

________________________________________________________________________________________________________________________________________________________________

________________________________________

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